Binance Founder and former CEO, Changpeng Zhao, has been sentenced to four months in prison after pleading guilty to charges of enabling money laundering on his crypto exchange.
“You had the wherewithal, the finance capabilities, and the people power to make sure that every single regulation had to be complied with, and so you failed at that opportunity,” U.S. District Judge, Richard Jones, said to Zhao in a Seattle federal court, according to a Reuters report.
Zhao’s sentence was shorter than the three-year term federal prosecutors had pursued, local reports say. His defence had requested five months of probation, whereas sentencing guidelines are said to have indicated a prison duration ranging from 12 to 18 months.
“I’m sorry,” Zhao told the judge before receiving his sentence.
“I believe the first step of taking responsibility is to fully recognize the mistakes,” Zhao reportedly said earlier in court.
“Here I failed to implement an adequate anti-money laundering program… I realize now the seriousness of that mistake.”
I would like to thank everyone for your care and support, be it writing letters, showing support on X, or in any other form. They all mean a lot to me and keep me strong. I will do my time, conclude this phase and focus on the next chapter of my life (education).
I will remain a…
— CZ 🔶 BNB (@cz_binance) May 1, 2024
In November 2023, Zhao reached an agreement with the U.S. government to settle a lengthy investigation into Binance. As per the settlement terms, Zhao resigned from his position as the company’s CEO, while the U.S. ordered Binance to pay $4.3 billion in fines and forfeiture.
REGULATION | #Binance Admits to Wrongdoings, to Pay $4 Billion Penalty as Founding CEO Steps Down
The U.S. Federal government also issued a warning to the rest of the cryptocurrency industry.https://t.co/wScRV3EGpb pic.twitter.com/Y4fYBhRmGm
— BitKE (@BitcoinKE) November 22, 2023
Zhao agreed to pay a $50 million fine.
Zhao is accused of willfully failing to implement an effective anti-money laundering program as required by the Bank Secrecy Act, and of allowing Binance to process transactions involving proceeds of unlawful activity, including between Americans and individuals in sanctioned jurisdictions.
Incidentally, Binance is also facing money laundering charges in Nigeria.
🇳🇬REGULATION | #Binance Yet to be Served with Charges in Nigerian Case, Case Postponed to May 17 2024
Binance and its executives, including Tigran Gambaryan, a U.S. citizen serving as Head of Financial Crime Compliance, and Nadeem Anjarwalla, a British-Kenyan Regional Manager… pic.twitter.com/YrvBuS8fuU
— BitKE (@BitcoinKE) April 22, 2024
Despite no longer holding an active role in the company, reports suggest that Zhao retains an approximate 90% ownership stake in Binance.
In March 2024, former FTX CEO, Sam Bankman-Fried, received a 25-year prison sentence for offenses related to the management of his cryptocurrency exchange. In contrast to Zhao and the allegations against Binance, Bankman-Fried’s defunct exchange was accused of fraud and misappropriation of customer funds.
[TECH] CEO of FTX Crypto Exchange, Sam Bankman-Fried, Sentenced to 25 Years in Prison: Sam Bankman-Fried, the Co-Founder and former CEO of crypto exchange, FTX, and trading firm, Alameda Research, was senten.. https://t.co/BmtGBy8Tz6 via @BitcoinKE
— Top Kenyan Blogs (@Blogs_Kenya) March 29, 2024
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